Much of the contents of the Clearance Instructions will become the contents of our discussions which follow this Blog.
One departure from past requirements on the Clearance Instructions is the insertion of the tariff heading. In the past, traders were required to indicate the tariff heading on the Clearance Instructions. Today, SARS Customs is giving the option for traders to provide either the tariff heading, or a precise description of the goods. It is in any event a requirement in terms of the legislation that traders must provide a description of the goods on the commercial invoice. What is different here is the word “precise” description. Most commercial invoices today contain abbreviated descriptions, if at all. The description now required on the instructions (if provided in lieu of a tariff heading) should be enough to allow both the LSP (Logistics Service Provider) and Customs with the ability to tariff a product without further inputs or literature to be produced.
The contents of the instructions proposed in the Rules to the new legislation are included below (abbreviated):
a) Name and customs code of the principal issuing the instruction.
b) Customs procedure or whether for home use.
c) Origin of the goods.
d) Origin determination, if applicable.
e) The tariff heading or a precise description of the goods.
f) Tariff determination, if applicable.
g) Price paid or payable.
h) Quantity of the goods.
i) Valuation method.
j) Value determination, if applicable.
k) Any advance ruling applicable to the goods.
l) Destination of the goods.
m) Trade agreement, if applicable,
n) GSP (General System of Preferences) if applicable.
o) Tax payment method.
p) Any other information which may be applicable.
The Customs procedure (point b) is similar to the old Purpose Codes (i.e. Duty Paid, Industrial Rebate, etc.).
The ROO (Rules of Origin) (point’s c – d) are becoming more important to Customs than before. It will eventually become a larger area of study than tariff and valuations. This is because of the increasing importance of regional trade agreements such as the TDCA (Trade, Development Cooperation Agreement) commonly referred to as the EU / SA Trade Agreement, and the SADC (Southern African Development Community).
Advance rulings (point k) is a new buzzword in the new legislation. All Customs Rulings (i.e. Customs Determinations) regardless of their nature will be valid for a period of three years only. Traders will need to re-apply for Customs Rulings every three years for them to remain in force.
Trade Agreements (point m) relates to preferential rates of duty. This is similar to ROO.
Tax Payment Method (point o) relates to whether SARS must be paid by cash, deferment or Vat only payments. This is normally managed by your LSP.
These issues will be discussed in the numerous Blogs and Sections which follow.